TAUNTON - The City Council this week will weigh whether to revoke a tax increment finance property-tax discount for one of Taunton's major employers.

In August 2009, Agar Supply Company Inc., on John Hancock Road in Myles Standish Industrial Park, received City Council approval for a five-year extension to its existing TIF deal, as per recommendation of the city's economic development incentive board.

The approval was contingent on the company's plans for a 50,000-square-foot warehouse expansion, and a promise that it would retain a workforce of nearly 400 while also adding 25 new jobs over the course of the agreement.

The company broke ground on the expansion project in November 2009.

The TIF extension meant that until 2017, Agar would save $171,000 in property taxes while paying the city $438,000. At the time, the company said they were investing $8 million in the expansion project.

One month after the City Council approved the TIF extension, the state bestowed its own certified-project status unto the food distribution company, thereby making it eligible for tax credits.

Kevin Shea, executive director of Taunton's office of economic and community development, has submitted a resolution to the council summarizing the state's decertification of Agar as a "certified project" in the Massachusetts Economic Development Incentive Program.

Shea's resolution proposes that the council "ratify" the decertification by the Massachusetts Economic Assistance Coordinating Council, and revoke Agar's local certified status for the remainder of its property-tax discount.

Agar Supply has now been denied their tax credits, according to a "notice of decertification" provided by Shea from the state's economic-assistance council; the state body voted to decertify Agar on Dec. 18, 2013.

The notice of decertification states that Agar was deemed noncompliant as per its fiscal 2012 annual report.

Agar, which for years was recognized as New England's largest independent food distributor and 12th largest food distributor in the country, subsequently was bought in September 2012 by Reinhart Foodservice LLC.

The Taunton facility continues to operate under the Agar banner.

Reinhart has 32 U.S. distribution facilities and is part of Illinois-based Reyes Holdings LLC. Reyes also owns Martin-Brower — which supplies food to more than half the McDonald's restaurants worldwide — and a beer distribution company called Reyes Beverage Group.

The state's decertification notice explains that each municipality has a right to uphold the terms of a TIF agreement, even if the company has been decertified by the state.

In his cover letter to the City Council, Shea states that Reinhart has decided not to appeal the state's decision.

"We have to hold them responsible to uphold their end of the bargain. And if they don't I'll look to decertify," City Council president A.J. Marshall said, "we need to hold them accountable."

Shea said it's not surprising that Reinhart isn't appealing, since the bulk of a TIF's property-tax discount is front-loaded into the first few years of an agreement.

Page 2 of 2 - Agar has operated out of Taunton since 2000. It's origins date to 1940 on Clinton Street in Boston's old meat district where it supplied food mainly to Chinese restaurants.